Proof that capitalism and regulations work
Again, they are all the same, (rep, dem together)Corporate prevaricators have carefully masked corruption as unnecessary regulation that retards the potential of free market activity. The corporate sectors ability to regulate the federal government is the source of the economic carnage American citizens currently experience!
Federal legislators are searching for anyone to blame for malicious mortgage behavior. The Justice Department might bring charges against 1000"s of mortgage professional for unethical conduct. Federal legislators unwillingness to regulate corporate America is the source of the country"s economic problems. These legislators have buried themselves in the law for decades! The corporate lobbyists have made sorry chumps of legislators, and their revered law!
in the 1990, Bill Clinton was already in bed with Goldmann Sachs...
So again, all the same,Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear.
Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"
Bill Clinton,
Senator Phil Gramm is now economic or financial adviser from Mc cain,... just connect the dots....
Phil Gramm, McCain's economic advisor was the Senator most responsible for the loosening of controls, along with his Republican Congressional goon friends, which permitted this and Enron to happen
( do some googling about Senator Phil Gramm...)
or listen to the explication of the sub-prime mortgage crisis
This is the only way how to understand this complicated system of scam and corruption,....
Law professor Michael Greenberger joins Fresh Air to explain the sub-prime mortgage crisis, credit defaults, the shaky future of other types of loans and what we can expect from the U.S. financial markets.
Greenberger is a professor at the University of Maryland School of Law and the director of the University's Center for Health and Homeland Security.
http://www.npr.org/templates/story/stor ... d=89338743
Look, I have a Cristal ball,
I can predict you now the next big scandal:
Next up....Malicious Oil speculators and the congressmen that write ENRON loopholes.
Again, the "laissez-faire" policy clearly failed....
Too many victims, too many big losses, too many families destroyed, life's destroyed,..
The alarm bells went of too slow and people are paying now for this...
Look again, Capitalism is fine. But, this never would have happened had regulations of this sector not been gutted over the past 20 years , , , under both repub and Dem administrations.
The government ( democrats or republicans, just the same)is bought, in the pocket of BIG CORPORATE AMERICA.
Corporate America has been sending too long lobbyists to Washington.
They bought up the legislators and the executive branch.
It is clear by now that politicians are simply bought by lobbyists.
That is why the system is failing
.
at least now they're admitting they were wrong
Bushes and the Neocon's "Laissez-faire" politics failed....
everybody involved is calling for MORE Government oversight and control.
MORE REGULATIONS ARE NECESSARY.....
The system clearly failed.....
at least now they're admitting they were wrong
Bushes and the Neocon's "Laissez-faire" politics failed....
everybody involved is calling for MORE Government oversight and control.
MORE REGULATIONS ARE NECESSARY.....
The system clearly failed.....
In reversal, Washington seeks more financial regulation
By Kevin G. Hall | McClatchy Newspapers
WASHINGTON — After at least a quarter-century of pressing for deregulation of financial markets, economists and members of Congress are pushing for renewed regulation in hopes of heading off a collapse of the global banking system.
Federal Reserve Chairman Ben Bernanke on Tuesday became the latest official to call for additional government powers, saying that the Fed should be given more authority to determine how much cash investment banks are required to keep in reserve and to monitor how they manage the risk involved in their investments.
When the head of the Fed calls for greater financial regulation, echoing Treasury Secretary Henry Paulson, a former Wall Street titan, it's significant. It's also a repudiation of the long-held view that markets alone can best regulate themselves. Whether regulations will be successful is an open question.
"I think it is going to be a turn back towards more regulation, but it's not going to be so easy," said Barry Bosworth, a presidential adviser in the 1970s who's now a senior economics fellow at the Brookings Institution, a center-left research center. "I think they've got a dilemma that some of these new financial instruments, and markets, have become so complex. If they continue to let them operate, it’s not clear that the regulators will be able to keep up."
Vincent Reinhart agrees. Until recently he was the chief economist of the Fed's interest rate-setting Open Market Committee. Reinhart, too, thinks that significantly stronger regulation is coming.
"I think it's quite possible that in the spring of next year, we will have the most significant re-regulation in memory, and I don't think it's (in the last) 25 years. I think it's 75 years, and you've got to go back to 1933” and the Great Depression, said Reinhart, who's now an analyst at the American Enterprise Institute, a conservative research center.
Bernanke signaled clear support for congressional and Bush administration efforts to bolster existing financial regulations when he spoke Tuesday to a Federal Deposit Insurance Corp. forum in suburban Washington. He supported expanded Fed powers to guard against system-wide shocks to global finance, but cautioned that his agency needs Congress to grant it explicit authority, which it now lacks.
"The financial turmoil since August underscores the need to find ways to make the financial system more resilient and stable," Bernanke said.
The recent collapse of investment bank Bear Stearns is driving the push for new regulation. The Fed was forced to step in on March 14 and, over a single weekend, broker the fire sale of Bear Stearns to rival JP Morgan Chase after investors began the modern-day equivalent of a run.
The Fed also agreed to provide emergency lending to investment banks, something it had not previously done. While the Fed has long been the lender of last resort to troubled commercial banks, which it regulates, it has no explicit authority to do so with investment banks, which it doesn't regulate.
Former Fed Chairman Paul Volcker has suggested that the Fed overstepped its authority, but Bernanke maintains that the move was legal because the Fed has broad responsibility to protect the U.S. financial system from collapse.
Since then Treasury Secretary Paulson, a former chairman and chief executive officer of investment bank Goldman Sachs & Co., has offered a blueprint for revamping the regulation of financial markets. He recently said that some of his proposals shouldn't wait.
On Thursday, the House Financial Services Committee will hold the first of several hearings on the state of financial market regulation and the safety and soundness of the banking system. Bernanke and Paulson are scheduled as the lead-off witnesses.
Before the hearings, Bernanke spelled out what he wants from Congress: a new, more robust framework for regulating investment banks, which aren't subject to supervision and capital requirements, unlike commercial banks.
The Securities and Exchange Commission has oversight of the holding companies that own investment banks, but the oversight is based on voluntary agreements with the banks.
"Strong holding-company oversight is essential, and thus, in my view, the Congress should consider requiring consolidated supervision of those firms, providing the regulator the authority to set standards for capital, liquidity holdings and risk management," Bernanke said.
Investment banks also are deeply involved in trading complicated financial products called over-the-counter derivatives. These transactions are often are not recorded on a bank’s balance sheet, meaning they are often hidden from the attention of regulators.
This largely unregulated market is huge. The Bank of International Settlements estimates that as of June 2007 derivative deals were valued in excess of $500 trillion. For comparison, the entire U.S. economy produces about $14 trillion in goods and services each year.
The risk to the global banking system from derivatives became apparent during the sudden March meltdown of Bear Stearns. The Fed feared that allowing Bear Stearns to fail could lead to confusion over who owed what to whom in derivatives markets, sparking panic and a run on other investment banks and perhaps collapse in global financial markets.
In the months ahead, Congress will look at the trading in such complex instruments and try to determine where to regulate and perhaps what to prohibit.
"I think they are going to be forced openly to think about banning some of these instruments," economist Bosworth said. He said that forcing banks to disclose some of their investments may simply lead them to pull out of certain markets.
Reinhart, the former Fed economist, sees similar changes ahead.
"When you get into the whirlwind of regulation, it could involve rolling back some financial (instruments) … I wouldn't rule out eliminating (some) financial instruments," said Reinhart.
Unlike his predecessors, who came from Wall Street and business backgrounds, Bernanke was a career academic. As Fed chairman, he hasn't dogmatically rejected government regulation. This at times has put him at odds with more conservative presidents of regional Federal Reserve banks.
One of them is Jeffrey Lacker, president of the Richmond Fed, which oversees banking and tracks economic activity from South Carolina to Delaware. Lacker has criticized the Fed's sale of Bear Stearns and its opening of the discount window to investment banks. After a speech Tuesday in Washington, when speaking to a handful of reporters, he favored letting financial markets self regulate.
"All of these entities are subject to market discipline to some extent or another … we broadly have a system in which a huge swath of the financial system is regulated primarily by market discipline. I don't think we should give that up," Lacker said, warning against "bringing everything under the close scrutiny of a supervisory authority."
'More robust' regulation needed for Wall Street firms: Bernanke
AFP
Published: Tuesday July 8, 2008
Federal Reserve chairman Ben Bernanke called Tuesday for legislation to provide "more robust" supervision of Wall Street investment firms to help avert crises like the one that felled Bear Stearns.
Bernanke, speaking to a forum on mortgage lending, said regulatory loopholes helped precipitate the crisis in the US housing sector that spread to banks and investment firms that financed real estate speculation.
"The enormous losses and writedowns taken at financial institutions around the world since August, as well as the run on Bear Stearns, show that, in this episode, neither market discipline nor regulatory oversight succeeded in limiting leverage and risk-taking sufficiently to preserve financial stability," Bernanke said.
The Fed chief said the central bank was working with the Securities and Exchange Commission as well as a White House working group to help beef up oversight of the financial industry, including investment firms not directly under Fed supervision.
"In the longer term, legislation may be needed to provide a more robust framework for the prudential supervision of investment banks and other large securities dealers," he said.
"Strong holding company oversight is essential and thus, in my view, the Congress should consider requiring consolidated supervision of those firms, providing the regulator the authority to set standards for capital, liquidity holdings, and risk management."
He said Congress "should consider whether our current regulatory structure needs to be modernized to address the changes that have occurred in the structure of the financial system, including the enormous growth of nonbank financial institutions and the development of new financial products."
Bernanke's comments come amid a wide-ranging review of supervision of the financial system in the wake of the housing meltdown that many say was fueled by too much speculation and easy lending, including for "subprime" loans to borrowers with weak credit.
"The financial turmoil is ongoing, and our efforts today are concentrated on helping the financial system return to more normal functioning," he said.
"It is not too soon, however, to begin to think about the steps we might take to reduce the incidence and severity of future crises."
Bernanke said the Fed, which opened up its credit to Wall Street firms outside the banking sector this year for the first time since the 1930s, was considering extending that option beyond year-end, "should the current unusual and exigent circumstances continue to prevail in dealer funding markets."
"proof that capitalism and regulations work" ????????
Bear Stearns, Freddie Mac and Fannie Mae,....
a very short conclusion in the Bangkok Post today:
Saved by public money
For many years we have been hearing from capitalist bigwigs that any kind of public intervention in the economy is not productive, that markets should self-regulate.
With the US sub-prime crisis, public money is coming to the rescue of companies that took thoughtless risks, under the applause of the same people who used to abhor public interventionism!
I hope they understand now why responsible governments implement rules in a sector where ethics is an unknown notion.
Bear Stearns, Freddie Mac and Fannie Mae,....
a very short conclusion in the Bangkok Post today:
Saved by public money
For many years we have been hearing from capitalist bigwigs that any kind of public intervention in the economy is not productive, that markets should self-regulate.
With the US sub-prime crisis, public money is coming to the rescue of companies that took thoughtless risks, under the applause of the same people who used to abhor public interventionism!
I hope they understand now why responsible governments implement rules in a sector where ethics is an unknown notion.
Fannie Mae and Freddy Mac are only the most recent and extreme version of Wall Street socialism. The Bush administration has done essentially the same for private providers of college loans. The Federal Reserve has made taxpayers the guarantor not simply of the banks that it regulates, but the shadow banking system of hedge funds and investment houses that it doesn’t regulate. After the bailout of Bear Sterns, they basically are gambling with our money. The Federal Reserve has now traded more than $500 billion in federal bonds for the toxic paper of private banks and investment houses, some $200 billion of it in mortgage backed securities, worth dimes on the dollar. This massive subsidy—justified as necessary to keep the banking system afloat—is not accompanied by limits on what gambles the speculators can make, how much debt they can take on, what rewards they can pocket. They are playing with house money—not exactly an incentive for prudence
-Bush & CO enabled this crisis by deregulating the mortgage lenders,
while ignoring cries from government officials about the potential market meltdown.
Again more proof that the capitalist system needs more checks and balances.
"GREED" runs the capitalist system, no problem,
but when greed runs fee, DANGER, DANGER...
Greed has to be kept on the lees...
-When did the free market become the risk-free market?
It seems Big Business doesn't want to take any risks unless they're guaranteed a profit -- by the taxpayers?????
First it was Bear Stearns in the Spring, then more brokerage houses followed, and now it's FreddieMac & FannieMae -- everyone but the borrowers.
while ignoring cries from government officials about the potential market meltdown.
Again more proof that the capitalist system needs more checks and balances.
"GREED" runs the capitalist system, no problem,
but when greed runs fee, DANGER, DANGER...
Greed has to be kept on the lees...
-When did the free market become the risk-free market?
It seems Big Business doesn't want to take any risks unless they're guaranteed a profit -- by the taxpayers?????
First it was Bear Stearns in the Spring, then more brokerage houses followed, and now it's FreddieMac & FannieMae -- everyone but the borrowers.
http://online.wsj.com/article/SB1216412 ... whats_newsHow The Government Became A Predatory Lender
Federal officials heap much of the blame for the subprime mortgage mess on lenders, claiming they recklessly made too many high-cost home loans to borrowers who couldn't afford them.
It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court.
Read the full story herein the Wall Street Journal
Democrats are forever trying to level the playing field by making concessions for those who do not qualify for home loans. They are forever trying to create winners out of losers to the detriment of all.
Through their encouragement, loan packages were created for those who rarely qualify for home loans due to bad credit or lack of a "proper" down payment.
Just goes to show that the best things in life are EARNED. The Dems didn't bank on the folks not being able to make their payments and pay for something that they should have never purchased in the first place.
Yes, in a capitalist economy, things must be earned. I have never had a problem earning my way or paying my way.
Through their encouragement, loan packages were created for those who rarely qualify for home loans due to bad credit or lack of a "proper" down payment.
Just goes to show that the best things in life are EARNED. The Dems didn't bank on the folks not being able to make their payments and pay for something that they should have never purchased in the first place.
Yes, in a capitalist economy, things must be earned. I have never had a problem earning my way or paying my way.
Oh, sorry, I forgot to blame it on the democrats
by the way, Bush is blaming it on wall street:
GREED, GREED, GREED
watch how he got Bushed:
he asked to turn of the cameras,
the news he had to say wasn't for the ears of the world and the american people....
"wallstreet was drunk"
http://www.youtube.com/watch?v=JgEuuypvzpY
For once Bush seems to know what he is talking about
Guess who was giving Wall Street the booze to get drunk?
by the way, Bush is blaming it on wall street:
GREED, GREED, GREED
watch how he got Bushed:
he asked to turn of the cameras,
the news he had to say wasn't for the ears of the world and the american people....
"wallstreet was drunk"
http://www.youtube.com/watch?v=JgEuuypvzpY
"Wall Street Got Drunk": 'Banned' Bush Video Surfaces
Posted July 22, 2008 | 04:50 PM (EST)
An ABC-TV outlet in Houston, and now the Houston Chronicle, have posted a video taken at a political fundraiser for Pete Olson, featuring George W. Bush last week -- capturing some embarrassing/revealing moments after, he noted, he had asked cameras to be turned off.
The first moments form the July 18 event find him speaking almost incoherently in admitting, for once, that his friends in big business had screwed up: "There's no question about it. Wall Street got drunk ---that's one of the reasons I asked you to turn off the TV cameras -- it got drunk and now it's got a hangover. The question is how long will it sober up and not try to do all these fancy financial instruments."
Then, making light of the foreclosure crisis, he said: "And then we got a housing issue... not in Houston, and evidently not in Dallas, because Laura's over there trying to buy a house. [great laughter] I like Crawford but unfortunately after eight years of sacrifice, I am apparently no longer the decision maker."
For once Bush seems to know what he is talking about
Guess who was giving Wall Street the booze to get drunk?
Your ignorance is deafening when it comes to understanding the powers of the three branches of government, cookie. Despite my efforts to provide education, you continue to spout false assumptions.
When I first arrived at UdonMap.com, I never had any expectation of debating American politics, but the ignorance and insulting remarks toward Americans and our goverment by you and others like you (a small minority, I might add), motivated me to respond. My country is not perfect, but it is still my country, and it has provided me with many opportunities that people in other countries can only dream about. I enjoy working for what I have acquired. I enjoy paying my way in life. I do not expect my government to give me anything, and I always provide what I can to those who are truly in need.
I now realize that you just hate America and hate those who attempt to defend the country. Misery loves company, and I am sure that you'd like to see America become the unessential doormat that your country has become. You would derive great glee from that, I'm sure.
Debate yourself ... and anything else that you can do alone.
Choke dee!
When I first arrived at UdonMap.com, I never had any expectation of debating American politics, but the ignorance and insulting remarks toward Americans and our goverment by you and others like you (a small minority, I might add), motivated me to respond. My country is not perfect, but it is still my country, and it has provided me with many opportunities that people in other countries can only dream about. I enjoy working for what I have acquired. I enjoy paying my way in life. I do not expect my government to give me anything, and I always provide what I can to those who are truly in need.
I now realize that you just hate America and hate those who attempt to defend the country. Misery loves company, and I am sure that you'd like to see America become the unessential doormat that your country has become. You would derive great glee from that, I'm sure.
Debate yourself ... and anything else that you can do alone.
Choke dee!
don't know what BS you are talking about,Ricohoc wrote:Your ignorance is deafening when it comes to understanding the powers of the three branches of government, cookie. Despite my efforts to provide education, you continue to spout false assumptions.
When I first arrived at UdonMap.com, I never had any expectation of debating American politics, but the ignorance and insulting remarks toward Americans and our goverment by you and others like you (a small minority, I might add), motivated me to respond. My country is not perfect, but it is still my country, and it has provided me with many opportunities that people in other countries can only dream about. I enjoy working for what I have acquired. I enjoy paying my way in life. I do not expect my government to give me anything, and I always provide what I can to those who are truly in need.
I now realize that you just hate America and hate those who attempt to defend the country. Misery loves company, and I am sure that you'd like to see America become the unessential doormat that your country has become. You would derive great glee from that, I'm sure.
Debate yourself ... and anything else that you can do alone.
Choke dee!
but it seems to me that you also didn't like the "Cowboy" Bush talk,
especially after he asked to close the cameras... perhaps he has something to hide, the truth perhaps????
I am also convinced that cookie is a hater of America,so focused on negative comments,yet not an American!
He/she probably enjoys the windup and controversy almost as much as he/she hates America!
''Trolling ''afforded by anonymity can be its own reward for some individuals disguised as debate!
Even the overuse of the Emoticons is telling,IMO
Goodbye cookie
He/she probably enjoys the windup and controversy almost as much as he/she hates America!
''Trolling ''afforded by anonymity can be its own reward for some individuals disguised as debate!
Even the overuse of the Emoticons is telling,IMO
Goodbye cookie
-
jackspratt
- udonmap.com
- Posts: 17129
- Joined: July 2, 2006, 5:29 pm
I am struggling to find anything in cookie's posts which indicate a hatred (there's that word again, so beloved by conservatives) of America.
He certainly has a strong focus on matters American which he does not like, or disagrees with. But as he is generally quoting from news items, reports, etc, it appears he is not alone - and in particular, seems to have strong support from within the US.
From where I sit, it seems an attitude sometimes prevails that liberals have no right to debate issues (American or otherwise). And why? - because they are liberals of course
He certainly has a strong focus on matters American which he does not like, or disagrees with. But as he is generally quoting from news items, reports, etc, it appears he is not alone - and in particular, seems to have strong support from within the US.
From where I sit, it seems an attitude sometimes prevails that liberals have no right to debate issues (American or otherwise). And why? - because they are liberals of course
Ah, yet another hater rears his/her head in defense of the cookie.
cookie's body of work is what is being questioned, not any individual post. And by the way, I'm not going to debate that either. I am only posting to clarify my position for you and the other 2 or 3 haters who may choose to whine and wring their hands over capitalism, conservatism and/or America.
Good day and Choke dee to you too!
cookie's body of work is what is being questioned, not any individual post. And by the way, I'm not going to debate that either. I am only posting to clarify my position for you and the other 2 or 3 haters who may choose to whine and wring their hands over capitalism, conservatism and/or America.
Good day and Choke dee to you too!
-
jackspratt
- udonmap.com
- Posts: 17129
- Joined: July 2, 2006, 5:29 pm
As far as I am aware, I am the only one to "defend" cookie - but then again, the world, and perhaps this forum, is full of "haters" to those who may be paranoid.
I take it from your post that it is OK to question cookie's "body of work". But not to defend it, lest one be labelled a "hater", "hand wringer" or "whiner".
Based on your body of work, your position hardly requires clarification - it is quite clear for all to see (and make their own judgement).
As is your insincerity.
I take it from your post that it is OK to question cookie's "body of work". But not to defend it, lest one be labelled a "hater", "hand wringer" or "whiner".
Based on your body of work, your position hardly requires clarification - it is quite clear for all to see (and make their own judgement).
As is your insincerity.
.
Today The Nation editorial on the US's laissez-faire philosophy.
It seems to me that the Thai don't forget history so soon...
They didn't forget what the US told Thailand at the time to do, and now they are wondering why the US isn't doing now what they were preaching to the Thais then.
(These Thai have to be american haters.....)
Today The Nation editorial on the US's laissez-faire philosophy.
It seems to me that the Thai don't forget history so soon...
They didn't forget what the US told Thailand at the time to do, and now they are wondering why the US isn't doing now what they were preaching to the Thais then.
(These Thai have to be american haters.....)
OVERDRIVE
Is the US too big to fail? it seems to think so
By Thanong Khanthong
The Nation
Published on July 25, 2008
America is now acting as if it is too big to fail.
The US Congress on Wednesday passed a wide-ranging housing rescue plan to help ease the downward spiral in the property market that is weighing heavily on the US economy. The plan offers aid to homeowners facing foreclosure and seeks to support mortgage finance giants Fannie Mae and Freddie Mac. Initially, President George Bush threatened to veto the bill.
After the Senate vote, he is now more inclined to sign it into law for fear that a collapse of the housing and credit market could sink to the US economy into a depression similar to that of the 1930s. Bush is throwing away his free-market beliefs.
Most Republicans are fuming over the housing legislation, which amounts to a handout for irresponsible homeowners and unscrupulous lenders. However, they do not have enough votes to block the bill.
The bailout of the US housing market raises a fundamental question about the US's laissez-faire philosophy. According to the tenets of free enterprise, businesses that make mistakes must go under. It is not the role of taxpayers to shoulder the burden of irresponsible enterprises or managers. After the bailout of Bear Stearns, the Wall Street firm, Treasury Secretary Henry Paulson is now scrambling to put together a package to bail out Fannie and Freddie. The estimated cost of rescuing the two mortgage finance giants ranges from US$25 billion (Bt835 billion) to $100 billion.
Fannie and Freddie account for about half of the $12 trillion US housing market. They have issued some $5 trillion in mortgage-backed securities. Of this, $1.5 trillion is subscribed by foreign institutions such as the central banks of China and Japan. Fortunately, the Thai regulation is still outdated. Otherwise, the Bank of Thailand could have dished out its excess international reserves to subscribe to the mortgage-backed securities of Fannie and Freddie.
The legislation, which passed in the House by 272 votes to 152, aims to provide $3.9 billion dollars to help local governments buy and rehabilitate foreclosed homes. It also permanently boosts the dollar limit for mortgages that can be repurchased by Fannie and Freddie and expands the federal mortgage insurance programme. By doing so, fresh liquidity can be added to the housing market. The bill would also allow the Federal Housing Administration to insure an additional US$300 billion in loans.
It is a bit odd that the bill aims to help homeowners keep their homes. The question is if people can't afford to pay for their homes, why bother? US mortgage lenders have been committing a grave financial sin by offering loans to Americans, who have poor credit and couldn't afford to pay for their homes in the first place. It is an American dream to own a home. But the American dream can't be realised by irregular wage or salary earners with poor credit records. This reckless lending spree went on with the illusion that the prices of the US housing market would climb forever. Moreover, mortgage loans were repackaged as mortgage-backed securities and sold off to investors worldwide. The banks and investment banking firms made a lot of money on these crazy sub-prime loans and securities.
When the US housing bubble burst last year, investors and financiers, as well as US authorities, went running for cover. Still, they mostly played down the crisis, believing that it would be contained. But the crisis is still far from over for the US economy. Loan defaults are now becoming common among those with good credit records. Bank and financial stocks have fallen by almost 70 per cent since last year. You may call it a financial meltdown.
It is estimated the damage in the US housing market could reach $1 trillion, potentially wiping out 75 per cent of the capital of US banks. Now the lenders and financiers are asking for help from taxpayers.
Thailand went through this painful episode before. When the country collapsed in 1997 under the weight of the financial crisis, the US leadership at the time was of the view that Thailand deserved its punishment from the financial markets because it had committed the financial sins of cronyism and nepotism. All the Thai banks must be sold out to foreigners, they said.
Now the US is doing the opposite of what it preached then. It is bailing out US banks that have committed financial sin. And it is resisting selling the US banks and investment banks to foreigners.
The US mess is not over yet.
](./images/smilies/eusa_wall.gif "Brick wall"){kind=small}
